Forming a limited liability company (LLC) is the process of turning your freelancing gig into a legal business entity. Incorporating as an LLC can offer business owners plenty of tax benefits. Plus, your personal assets are protected if something happens to the company, like bankruptcy.
Let’s just get the answer out of the way. No, you don’t need to hire a lawyer to set up a business. There’s no legal requirement to hire an attorney to form an LLC. In most states, you can register as a business entity with the IRS and on your secretary of state’s official website.
However, there are times when it’s a good idea to consult a lawyer. In this guide, we’ll show you what it takes to register your business, and times when you may need a lawyer.
How To Register Your Business As An LLC
To register your business as an LLC, you’ll need to go through a series of steps. All of these tasks can be accomplished on your own, but they may take you significantly longer.
Here are the steps to forming a limited liability company:
- Choose a Name: Choose an available name that you can use for your marketing (domain name and social media). Make sure it isn’t well-known or copyrighted.
- Choose a Registered Agent: A registered agent is a person who receives legal documents on behalf of the LLC. This is essential if you don’t have a physical presence.
- Prepare an Operating Agreement: What is an LLC operating agreement? It’s a document that clarifies the powers and responsibilities of LLC members.
- Complete Your Paperwork: Fill out an “articles of organization” with the appropriate state agency. Filing fees range from $50 to $200, depending on your state.
- Get an EIN and a Business Bank Account: An EIN is necessary to hire employees, while a business bank account is necessary to separate your personal expenses.
- Obtain a Business License: Depending on your business, you may need a seller’s permit, a general business license, industry-specific licenses, and state registration.
- Hire an Accountant: To stay compliant, businesses have to hire an accountant. The business owner may be too busy to take care of their own bookkeeping.
As you can see, a lot goes into registering a business. The whole process can take several months to complete, especially if you’re solely responsible for incorporating it into an LLC.
When You Would Want To Hire A Business Lawyer
One of the biggest reasons to hire a business lawyer is if you don’t have the time to handle the entire process yourself. You may also want to hire a lawyer if you’re worried about making a mistake. For $200 to $5000, you could have your business incorporated in a month.
Here are a few things a business lawyer could help you with:
- A lawyer can help you create an LLC operating agreement quickly.
- A lawyer could create “articles of organization” that list your registered agent.
- A lawyer could act as your registered agent or find a registered agent for you.
- A lawyer could keep detailed records in case of audits or lawsuits.
- A lawyer can register with the correct people and file fees on your behalf.
- A lawyer could register your business name and check if it’s taken.
- A lawyer could complete and file all of your formation and legal documents.
If there are concerns about personal liability or if the nature of your business is likely to lead to legal disputes, a lawyer may save you significant time and resources moving forward.
Taking the steps to form your LLC can be a significant milestone for anyone aspiring to launch their own business. And in some cases, seeking the right guidance can make all the difference.
It’s essential to make informed decisions about your business’s structure and future. So, if you’re feeling unsure or overwhelmed, don’t hesitate to reach out to a business lawyer who can provide much-needed clarity. Investing in reliable advice now will set you up for success.